The Secret Behind Growing E-Commerce Revenue: Customer Retention, Part 2
In part one of this series, we discussed the importance of earning your customers’ ongoing support, and how increasing customer retention by just 5 percent can boost profits by an average of 75 percent.
While retention marketing has been around for a while, this area of business will only continue to rise in importance as more consumers embrace e-commerce and the online marketplace becomes increasingly more crowded. In this article, we’ll explore a few more effective strategies for building customer relationships and the psychology behind them.
Create Loyalty Programs
One-sided relationships never work out, and a successful marketing strategy is no different. To remedy this imbalance, consider setting up a loyalty program, which can both create an emotional response from a customer and reward them for continuing to buy from your business. When done right, loyalty programs have been proven to increase repeat purchases by rewarding customers based on their level of engagement with your business. It’s an engaging way to increase the lifetime value of the average shopper — sometimes by up to four times.
Once a loyalty program is established, it’s time to grow membership and spread the word. The first step is cross promoting it through email marketing and social media to new and prospective customers. I’d also recommend incentivizing members to refer their family and friends for a discount, as referrals are almost 40 percent more likely to become repeat customers in the future.
Leverage Social Channels
It cannot be overstated how important customer reviews have become to small businesses as the world has moved online. People trust the opinions of other shoppers more than any marketing copy, and almost 97 percent of consumers research a business and read reviews online before making a purchase. Empowering customers to share their experience through public channels like social media can dramatically improve both the perception of a brand and its actual business.
In some cases, not having enough feedback or public reviews can actually be more detrimental than having a few negative reviews. In fact, data from Northwestern University estimates that products with more than five reviews perform nearly four times stronger than those with none — even if not all the reviews are positive.
Similar to surveying customers, simply asking them to leave feedback in a public review provides small businesses with an opportunity to learn more about what aspects of their business can be improved. Subsequently addressing these pain points publicly also builds a sense of trust and reliability with other consumers as they consider where they might buy from next.
Create Additional Content
The period right after a shopper makes a purchase is key for converting them into a long-term customer. It’s also a sensitive time for marketers because you need to balance being helpful and friendly while avoiding a hard sales pitch. While email marketing is an effective way to deliver this content to subscribers, I’d also recommend building up a strong content marketing strategy — which includes blogging and social media — to complement email campaigns.
There’s only so much space in an email or a product page to convey everything a consumer needs to know, and sometimes there's a need for content of different lengths. That’s why many brands establish their own blogs as an additional space to publish content and engage their audience. A company blog allows marketers to share a variety of content in a place that’s convenient for consumers to visit and read.
For example, consider a blog post dedicated to answering frequently asked questions (FAQs), or respond to industry trends that tie back to products and services your company offers. Or use a blog to create a one-stop shop for all the company’s news and updates that may not be the type of content customers would want to see in their inbox. In addition to improving search engine optimization, having a blog can help communicate a brand’s personality and establish authority on topics adjacent to the business.
Maintain the Connection
An overwhelming amount of data shows that retaining existing customers saves small businesses money and boosts their bottom line. Yet for many, this customer segment remains overlooked and has untapped potential. As the world shrinks and people become more connected, not only to each other, but to their favorite stores and brands, it’s increasingly important for business leaders to prioritize retaining those customers after they’ve worked so hard to acquire them.
These strategies can serve as a framework to help build a customer retention program by earning loyalty through engagement, value and rewards. Small businesses that achieve these goals will not only win new customers, they will retain them and turn them into vocal advocates of the brand.
Dave Charest is the director of content marketing at Constant Contact, an email marketing software provider.